The insured's home was covered under a flood policy issued by and through an insurance broker. Only one of two homes on the insured's lot was covered, however.

Hurricane Sandy caused severe damage and subsequent flooding to the home. Fidelity refused to provide coverage for damages sustained at the rear house located in the property. The insured contended that both the broker and Fidelity knew that the property consisted of two homes on a single parcel and were deemed two family, as evidenced on the declaration page of the policy.

The broker moved to dismiss the insured's state law negligent misrepresentation claim, arguing that the claim was preempted by the National Flood Insurance Act (NFIA). The broker contended that all disputes relating to claims under a flood policy were governed by flood insurance regulations issued by FEMA, the NFIA and by federal common law.

The court denied the motion to dismiss. The complaint alleged that the broker was aware that the property consisted of two homes on a single parcel and misrepresented to the insured that she was fully insured for the property in its entirety. Federal preemption did not apply in actions for tortious misrepresentation against flood carriers. While claims handling disputes were governed be federal law, a negligent misrepresentation claim sounded in tort and involved allegations of misrepresentations in the procurement of the policy, not in the adjustment of a claim under the policy.

The denial of the broker's motion to dismiss was without prejudice to raise the argument in the future if discovery revealed that the negligent misrepresentation claim, although sounding in tort, involved interpretation of policy language.

The insured's home was covered under a flood policy issued by and through an insurance broker. Only one of two homes on the insured's lot was covered, however.

Hurricane Sandy caused severe damage and subsequent flooding to the home. Fidelity refused to provide coverage for damages sustained at the rear house located in the property. The insured contended that both the broker and Fidelity knew that the property consisted of two homes on a single parcel and were deemed two family, as evidenced on the declaration page of the policy.

The broker moved to dismiss the insured's state law negligent misrepresentation claim, arguing that the claim was preempted by the National Flood Insurance Act (NFIA). The broker contended that all disputes relating to claims under a flood policy were governed by flood insurance regulations issued by FEMA, the NFIA and by federal common law.

The court denied the motion to dismiss. The complaint alleged that the broker was aware that the property consisted of two homes on a single parcel and misrepresented to the insured that she was fully insured for the property in its entirety. Federal preemption did not apply in actions for tortious misrepresentation against flood carriers. While claims handling disputes were governed be federal law, a negligent misrepresentation claim sounded in tort and involved allegations of misrepresentations in the procurement of the policy, not in the adjustment of a claim under the policy.

The denial of the broker's motion to dismiss was without prejudice to raise the argument in the future if discovery revealed that the negligent misrepresentation claim, although sounding in tort, involved interpretation of policy language.